Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
46 Cards in this Set
- Front
- Back
|
Common size statements |
A standardized financial statement presenting all items in percentage terms |
|
|
Financial ratios |
Relationships determined from a firms financial information and used for comparison purposes |
|
|
DuPont identity |
Popular expression breaking ROE into 3 parts: 1. Operating efficiency 2. Asset use efficiency 3. Financial leverage |
|
|
Substantial growth rate |
The maximum possible growth rate for a firm that maintains a constant debt ratio and doesn't sell new stock |
|
|
Internal growth rate |
The maximum possible growth rate for a firm that relies only on internal financing |
|
|
Days' sales in inventory |
Measures how long it takes to turn over inventory (on average) |
|
|
Capital intensity ratio |
The dollar investment in assets needed to generate $1 in sales |
|
|
Return on assets (ROA) |
Measure of profit per dollar of assets |
|
|
Market-to-book ratio |
Compares market value of firms investment to cost |
|
|
Return on equity (ROE) |
Measure of how stockholders fared during the year (true bottom line on performance) |
|
|
Dividend payout ratio |
Expressed dividends paid as a percentage of net income |
|
|
Retention ratio |
Anything not paid out in dividends must be retained in the firm |
|
|
Liquidity measures |
Short-term solvency ratios as group are intended to providing information about liquidity |
|
|
Financial leverage ratios |
Long-term solvency ratios intended to address firms long run ability to meet its obligations |
|
|
Amortization |
Noncash deduction applied to an intangible asset |
|
|
Inventory turnover |
Measures how efficiently inventory is being managed |
|
|
Equation for: Earnings per share (EPS) |
Earnings per share (EPS) = Net income / shares outstanding |
|
|
Equation for: Price earnings ratio (PE Ratio) |
Price per share / EPS |
|
|
Equation for: Market-to-book ratio |
Market value per share / book value per share |
|
|
Equation for: Price-sales ratio |
Price per share / sales per share |
|
|
Equation for: Enterprise value |
Total market value of stock + book value of all liabilities - cash |
|
|
Equation for: EBITDA ratio |
Enterprise value / EBITDA |
|
|
Equation for: DuPont identity of ROE |
Profit margin X total asset turnover X equity multiplier |
|
|
Equation for: Dividend payout ratio |
Cash dividends / net income |
|
|
Equation for: Retention ratio |
Addition to retained earning / net income |
|
|
Equation for: Internal growth rate |
ROA X b / 1 - ROA X b, where b = retention |
|
|
Equation for: Substantial growth rate |
ROE X b / 1 - ROE X b, where b = retention |
|
|
Equation for: Debt-equity ratio |
Total debt / total equity |
|
|
Equation for: Equity multiplier |
Total assets / total equity |
|
|
Equation for: Cash coverage ratio |
EBIT + depreciation / interest |
|
|
Equation quotation for: Inventory turnover |
Cat of goods sold / inventory |
|
|
Equation for: Days sales in inventory |
365 days / inventory turnover |
|
|
Equation for: Receivables turnover |
Sales / accounts receivable |
|
|
Equation for: Days sales in receivables |
365 days / receivable turnover |
|
|
Equation for: Total assets turnover |
Sales / Total assets |
|
|
Equation for: Capital intensity ratio |
1 / total assets turnover |
|
|
Equation for: Profit margin |
Net income / sales |
|
|
Equation for: Return on assets (ROA) |
Net income / total assets |
|
|
Equation for: Return on equity (ROE) |
Net income / total equity |
|
|
Equation for: Cash ratio |
Cash / current liabilities |
|
|
Equation for: Total debt ratio |
Total assets - total liabilities / total assets |
|
|
Equation for: Times interest earned (TIE) |
EBIT / interest |
|
|
Equation for: Quick (or acid) ratio |
Current assets - inventory / current liabilities |
|
|
Equation for: Retention ratio |
Addition to retained earnings / net income |
|
|
Equation for: Current ratio |
Current assets / current liabilities |
|
|
Equation for: Dividend payout ratio |
Cash dividends / net income |
